Study: Residential properties and homeowners in high flood hazard areas, 2022

The study "Analysis of residential properties and homeowners in high flood hazard areas," released today, uses housing data from the Canadian Housing Statistics Program and flood hazard data from Public Safety Canada to provide insight on the flood exposure of residential properties in Canadian communities.

Our take: Nearly 1.2M Canadian homes sit in high-flood zones—a material tail risk that insurers and lenders are already pricing in through rising premiums and tighter terms; income investors holding multifamily in flood-prone areas need to run climate stress scenarios and factor in elevated insurance costs eating directly into NOI.

In your underwriting: Insurance cost inflation and potential coverage gaps in flood zones will compress assumed NOI margins and may tighten lender appetite, raising mortgage rates by 25–50bps and requiring larger contingency buffers in cap rate calculations.

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